By Vahe Petrossian
24 November 2000
Middle East Economic Digest
Some three-and-a-half years after launching radical political reforms
in Iran, the presidency of Mohammad Khatami is in deep trouble. A frustrated
population is having to face the possibility of the reformist cleric leaving
office prematurely, ceding the initiative to his right-wing opponents.
Vahe Petrossian reports from Tehran on the prospects for domestic reform
and the implication for foreign business.
Will he or won't he? That is increasingly the question preoccupying
Iranians and foreign diplomats in Tehran six months ahead of a presidential
poll that was widely expected to usher in the second term of the Khatami
The reformist president, who has been in office since mid-1997, has
been sending strong signals in recent weeks that he may do the unthinkable
and not run for a second term. Following an official declaration of his
candidacy in late July, Khatami and his spokesmen have since said he has
yet to decide whether to take part in the presidential race scheduled
for May 2001.
The prospect of an Islamic republic without Khatami would delight most
of the president's conservative and right-wing enemies. It has already
alarmed his supporters, who fear losing whatever remains of the political
and social gains made since 1997.
There is also concern abroad about the future of Iran's opening to the
rest of the world under Khatami - including the low-key "dialogue"
he launched with the US in early 1998. Would the president's departure
mean a reversal of course?
The Islamic republic is going through one of its most crucial tests
since it emerged from the revolution of 1979. It has survived internal
and external wars, economic sanctions and other similar challenges; now,
it has to show whether it can manage the more difficult task of transforming
itself into a politically and socially mature society.
Khatami - who began his presidency more than three years ago amid high
expectations of a more open society where political and social freedoms
could flourish under the rule of enlightened Islamic law - is said to be
deeply frustrated and dispirited. Indeed, sources familiar with what is
being discussed in the presidential office say that the president has decided
not to run for a second term.
"Khatami has been telling his aides in recent weeks that he feels
powerless and thinks he can no longer meet public expectations of reforming
the system," says an insider in Tehran. "He says he doesn't want
to give his supporters false hope by running for a second term when he
knows he can't deliver."
So dejected is Khatami, says the source, that he has even told aides
he does not understand why they have not resigned. "I am elected and
have a duty to serve out my term, but you don't have these obligations,"
it is said he told aides.
Khatami apparently received his first big shock in July 1999 in the
aftermath of a violent vigilante and police attack on Tehran university
student dormitories. Right-wing gangs posing as reformist student supporters
of the president staged riots in Tehran to frighten the public and attacked
several mosques to panic the clergy. "These people are capable of
anything," the president is reported to have said in disgust. *A
To pleas that he should not abandon the field to enemies of reform,
he is said to have argued that his departure would expose right-wing factions
to the realities of popular pressures and might force them to be pragmatic.
Reformers say there is no one of Khatami's stature and popularity to take
over the leadership of the reform movement, should the president drop out
"It would be a catastrophe," one supporter says. "There
is no way that the coalition that helped bring him to power will allow
him to leave."
Indeed, leading Khatami supporters insist that the president will simply
not be allowed to drop out of the race. The second Khordad coalition behind
the president convinced him to run in 1997 even though he was "blankly
refusing to enter into politics" and it will probably do so again,
a local analyst says.
Whether he goes through with his threat or allows himself to be talked
into a second term, Khatami has had ample reason to lose heart. An intensive
campaign of harassment and persecution by right-wing factions in recent
months has resulted in the loss of many of the hard-won political gains
of the previous three years. The economy is also adrift despite a welcome
boost from high oil prices.
The political rot set in in April when, following another electoral
setback for the right in majlis elections, Supreme Leader Ayatollah Khamenei
gave the green light for the conservative-dominated judiciary to carry
out the wholesale closure of reformist publications. Starting with a dozen
newspapers, various press and clerical courts have so far shut down about
30 publications. Only two or three newspapers identified with the reform
movement are still open, but they are so cowed they tend to evade controversy.
Leading reformers, lawyers, clerics and journalists have been jailed
or are being tried for treason, collaboration with foreign enemies, and
on other implausible charges. Lawyers who distributed a videotaped confession
by a former vigilante alleging that senior officials associated with Khamenei
had ordered violent attacks against reform targets found themselves in
court. The officials concerned were apparently never questioned.
When the reformist-dominated majlis tried to introduce legislation barring
police from university campuses and started debating an amendment to restrictive
press legislation passed in the last days of the outgoing majlis, Khamenei
intervened once again.
In early August, a shocked parliament was effectively forced to halt
its debate on the press law. The press closures and the gagging of the
majlis seemed to nullify the popular vote for reform in the parliamentary
elections of early 2000.
Right-wing gangs continue harassment and intimidation of reformers with
apparent impunity. The judiciary and other conservative bodies seem more
interested in pursuing the victims of violence than its right-wing perpetrators
- as in Khorramabad in late August, when a national student gathering
was disrupted. Appeals by students and reformers for Khamenei and others
to condemn the violence go unanswered.
Khatami's personal problems extend to his cabinet, most of whose members
were inherited from the previous president, Ali Akbar Rafsanjani. Some
ministers, such as the one in charge of education, are deeply conservative.
Others, such as those holding economic portfolios, are feuding.
"Khatami spends his time in cabinet defending rather than leading,"
says an analyst.
Khatami and the whole country are also paying the price for the failure
so far to form genuine political parties. The absence of party machinery
has prevented political energies from being channelled and allowed too
much reliance on individuals.
Reformers are trying desperately to convince Khatami to carry on despite
setbacks. The majlis is seen by some as an important element in this effort.
Having recovered some of its composure since August, the majlis is said
to be working overtime to "show to Khatami that there is hope".
Parliament has taken the initiative on a number of economic issues - though
the initiative may backfire in the long term because deputies are not economic
experts and are bound to make mistakes, says an analyst.
*Majlis into the vacuum
In a reprise of journalists' role as political leaders in the first
three years of the Khatami administration, the majlis now seems to be stepping
into the vacuum. Instead of reacting to policy initiatives from the executive,
the legislature has been initiating policy both on economic and political
issues. It has become interventionist even on social issues - such as trying
to raise the marriage age for girls.
Khatami himself has for the past year tried both to reduce the expectations
of his supporters, and to encourage them to become more involved in politics.
He has repeatedly talked about the importance of not looking at him or
any one person as a "hero" who can single-handedly bring about
change. Only by participating in the process can people ensure successful
reforms, he stresses.
In the event, thinking conservatives, probably including Khamenei himself,
are thought not to want to lose Khatami. They appear to want Khatami to
continue but only as a crippled president who would help to keep the lid
on widespread public frustration and dissatisfaction, leaving the right
wing to carry on with its profitable business and political pursuits, critics
The right wing is probably more interested in the establishment created
over the past two decades maintaining control than in ideology per se.
Of particular concern to it is the threat posed by greater transparency
and a free press to those who have vested interests. Institutionalised
corruption and privilege, rather than concern over Islamic ideological
purity, are at the heart of opposition to reform.
If the right wing were to somehow take official charge of the executive,
there is little doubt among local analysts that it would carry out limited
but faster reforms in certain areas.
Any regression would mainly be limited to the political arena where
controls on public debate and on the press would be increased. In order
to maintain this political control, the right would make sacrifices on
most other fronts. Even social restrictions on what women wear in public
and other issues could be relaxed. During the recent months of conservative
crackdowns, Tehran cinema houses are showing unusually socially risque
films, including stories of young people suffering unjustly under oppressive
Despite their apparent obsession with the evils of the West, particularly
of the US, conservative factions have endorsed Khatami's international
opening and would probably undertake new initiatives. A key recipient of
right-wing affection would be the US, whose friendship would be useful
in scoring points with the younger generation in Tehran and could help
ease economic difficulties. Indeed, foreign investors could find a right-wing
administration more amenable to their interests.
In the economic sector, doors to privatisation efforts and Western investment
would be likely to be opened wider. Foreign investors would be encouraged
as part of efforts to prevent economic dissatisfaction from threatening
political controls. However, privatisation and other such economic reforms
would likely amount to little more than window dressing - with privatisation
further entrenching the crony capitalism created over the past decade.
China is the model for right-wing politicians such as Rafsanjani who talk
about the need for reform and change.
Khatami's determination to drop out may be his greatest asset - forcing
Khamenei and others to look at the unpleasant alternatives. There are certainly
no credible alternatives on the right. Approaches have been made to former
prime minister Hossain Moussavi, but he has ruled himself out.
Former foreign affairs minister Ali Akbar Velayati is being promoted
as a possible candidate, but he could not bring any credibility to campaign
or office. Some even talk about Rafsanjani returning for another bid, but
his humiliation at the parliamentary polls in early 2000 will no doubt
have taught him a lesson.
The best right-wing candidate would be unlikely to garner even one-fifth
of the popular vote. The elimination of any credible reformist candidates
would also keep turnout to a politically damaging low level of perhaps
one-quarter of the electorate.
The reformists' alternatives to Khatami are also limited. Islamic Guidance
& Culture Minister Ataollah Mohajerani has told friends he will run
if Khatami steps down. However, despite his popularity with the public,
he is mistrusted by leading reformers, who think of him as a demagogue
and question his commitment to reform.
Mohajerani had threatened in the autumn to resign, submitting a 50-page
letter to Khatami which the latter described as immoderate. Critics allege
Mohajerani was mainly interested in positioning himself for 2001. In the
event, right-wing plans to disqualify him with a threatened jail term
for political offences have resulted in Mohajerani deciding to remain under
the protection of his ministerial portfolio.
Other names mentioned as possible presidential candidates are those
of the president's brother and deputy majlis speaker, Mohammad Reza Khatami;
presidential adviser Saeed Hajjarian, who was crippled in an assassination
attempt in early 2000; former heavy industries minister and now deputy
majlis speaker Behzad Nabbavi; and Moussavi Khoeiniha, the one-time leader
of the militant students who took over the US embassy building in November
The options open to the reformists may be more credible than those for
the right. But there is no doubting that Khatami is an exceptional individual
who would be impossible to replace. "His main problem is that as a
politician he is not a street fighter," says an ally.
If he does drop out, his country will face a turbulent few years before
the reform movement regains its momentum.
If Khatami's allies are successful in persuading him not to abandon
the fight, the fate of the reform movement he has led will depend on the
clarity of his message to the electorate and the turnout on polling day.
The best that right-wing strategists can hope for is a subdued Khatami
receiving a qualified electoral mandate in 2001. Both sides face crucial
decisions in the coming months.